Trying to convince a coworker to.....

**cschin4** · 04-11-2010, 08:15 AM

He can convert his investments to cash. I converted some of my holdings into cash management funds or money markets without any consequences as it stayed in my retirement fund. I just wanted more cash and less risk. He can do the same.

**creditcardfree** · 04-11-2010, 09:13 AM

Originally posted by fruitbowlk View Post

he said he might not live long enought to retire and use his money.

But the odds are that he might live longer than the amount of money he has saved. I think it is fine if he uses some of the money, if that is what is about more than anything. Maybe he just feels insecure about knowing the options for rolling his retirement money.

Personally, I wouldn't want to bet that I won't outlive my money. Too scary to think about what that would look like!

**disneysteve** · 04-11-2010, 10:52 AM

Good luck with that. Trying to convince a clueless person why he shouldn't sacrifice 35% of his retirement savings to taxes and penalties is not an easy task. Being convinced that you won't live to see retirement age is an awfully depressing way to go through life.

**Snodog** · 04-11-2010, 05:44 PM

So he is going to pay tax on the money he takes out likely at a higher rate than if he were retired AND pay a 10% penalty. Not very efficient use of resources if you ask me. That said you probably won't be able to talk him out of it. Some people have to learn the hard way.

**ea1776** · 04-13-2010, 04:39 AM

somewhere a US Treasury official is smiling.

**BlackDiamond** · 04-13-2010, 05:32 AM

Originally posted by disneysteve View Post

Being convinced that you won't live to see retirement age is an awfully depressing way to go through life.

No it isn't. Perhaps he has an illness he doesn't want to share the details of with a casual coworker? I'll talk about money but not really about my health (aside from autism to raise awareness). Neither is anyone's business but I like talking finance and finance news. Anyway, I'm not too concerned about retirement either, although I did recently start a 401K, just in case, because of some genetic and medical issues it's very unlikely I will live to be much older than 65. Almost no one in my family has lived to even make it to 60. I'm not depressed about it in the slightest. It's just the way it is. It's not depressing when you accept it.

**Joan.of.the.Arch** · 04-13-2010, 06:01 AM

Black Diamond, if these short lives in your family are preceded by some years or even just months or weeks of disability, perhaps you need to focus on providing for yourself through those last disabled years (months? weeks?) even if they do occur before typical retirement age.

Ha, my elders just keep on living forever. I have no excuse.

**disneysteve** · 04-13-2010, 08:41 AM

Originally posted by BlackDiamond View Post

No it isn't. Perhaps he has an illness he doesn't want to share the details of with a casual coworker?

I suppose that's possible. Unless someone is imminently ill, though, I can't see cashing out the retirement plan just in case they die early. I hear this all the time - "What if I get hit by a bus tomorrow?" Well what if you don't? It would really suck to spend all of your money in expectation of an early death only to live well past that age. Then what would you do?

Also, my savings isn't just for me. It is for my wife and daughter, too. If I were to die prematurely, that money (along with life insurance), is what they will need to live. I'll keep on saving.

**BlackDiamond** · 04-13-2010, 09:00 AM

Originally posted by disneysteve View Post

I suppose that's possible. Unless someone is imminently ill, though, I can't see cashing out the retirement plan just in case they die early. I hear this all the time - "What if I get hit by a bus tomorrow?" Well what if you don't? It would really suck to spend all of your money in expectation of an early death only to live well past that age. Then what would you do?

Also, my savings isn't just for me. It is for my wife and daughter, too. If I were to die prematurely, that money (along with life insurance), is what they will need to live. I'll keep on saving.

There is a difference between "What if I get hit by a bus tomorrow" (a statistical improbability) and "I very likely will not make it to 60 due to genetic heart defects" or "I very likely won't make it to 50 because I have cancer". If a person has one of the latter issues, and has no one depending on their income then really, who cares if they have a retirement fund?

I have no life insurance and have no plans to. I have no family and never plan to, and don't care what happens to my body after I die. So I don't see the need to throw away money on a product that is completely useless to me such as life insurace.

**disneysteve** · 04-13-2010, 09:19 AM

Originally posted by BlackDiamond View Post

There is a difference between "What if I get hit by a bus tomorrow" (a statistical improbability) and "I very likely will not make it to 60 due to genetic heart defects" or "I very likely won't make it to 50 because I have cancer". If a person has one of the latter issues, and has no one depending on their income then really, who cares if they have a retirement fund?

I have no life insurance and have no plans to. I have no family and never plan to, and don't care what happens to my body after I die. So I don't see the need to throw away money on a product that is completely useless to me such as life insurace.

I'm not disagreeing at all. If someone already has a disease that will shorten their lifespan such as a heart problem or cancer, saving for a future that won't ever come doesn't make much sense.

As for life insurance, if you have no dependents, I agree that you have no need for life insurance.

I was talking about people who use this justification not to save when there isn't something already wrong with them. "My father died young so why should I save?" You should save because you might live a lot longer than your father (general "you", not you personally BD). I have patients in their 60s and 70s and even 80s who are stuck working full time because they didn't expect to live this long so they never made any plans for retirement. They could have saved. They just chose not to because they didn't think they'd be around. That's not too bright IMO. That's what I find depressing.

**BlackDiamond** · 04-13-2010, 09:26 AM

Well, I agree with you there.

**disneysteve** · 04-13-2010, 09:38 AM

Also, being a doctor, I could tell plenty of stories of patients who were "supposed" to die from their illness and didn't. Treatment worked and they lived years or decades after their diagnosis. And medical advances are being made every day in any number of areas. Unless death was pretty much certain, I don't know that I'd cash out the retirement accounts. It all depends on the situation and how badly I needed that money.

**snafu** · 04-13-2010, 08:32 PM

OP: Could you ask HR to bring in a guest speaker for a lunch hr. Q&A to explain options for retirement savings. There are lots of speakers who did this for no cost via the Chamber of Commerce or University Speaker Bureau. Investment/mutual fund agents also do this in the hopes of gaining clients.

Some people have problems accepting financial advice from people they know.

Trying to convince a coworker to.....